Car insurance deductibles and premiums are likely to have an inverse relationship, which implies the lower one is, the higher the other is.
Inverse Relation Between Car Insurance Deductibles And Premiums
A car insurance deductible is the total amount of money you’ll have to pay before your insurer makes payments out on a claim. According to a report, car insurance deductibles generally extend from $100 to $2,000. The most common car insurance deductible among drivers is $500. For instance, if you get into an unfortunate accident, you have to pay a car insurance deductible of $500 out of filing a claim for $1,500 worth of car repairs which the remaining $1,000 will be paid by your insurance company.
While it is true that opting for higher car insurance deductibles might lower premiums, it might not be ideal at some point since you can’t get out of paying car insurance premiums anyway. Taking into account that if you experience multiple accidents during the year, or if your car maintains damage from several occasions, then you may spend more money in the end.
Car Insurance Deductibles And Premiums Factors To Review
Now, let’s say that you live in a residential area where parking is everywhere, it is less likely that your car will get sideswiped, dinged, or vandalized. Considering this, the likelihood of filing claims for damage in a non-moving situation is lower, which is why it is recommended to avail of the higher car insurance deductibles. However, accidents are a whole different thing that may occur anywhere and at any time which means that selecting your car insurance deductibles depends on the risks you personally want to take on. On the fortunate side, higher car insurance deductibles might save you a lot of money. But on the unlucky side, you might really need to pay up big time.